TTAC Compares the Volt and the Prius

Holy @#, they quote Lutz saying $48K MSRP for the volt. For a car the size of a Cobalt. Are they out of their minds?

On the other hand, much of the later parts of the article shows clear anti-electric bias, imho. Not sure I'd believe that $48K quote unless I saw the source.

 

Oh my goodness, Lutz did say that, and was quoted in Business Week:

The road to higher auto-fuel economy - BusinessWeek.com - MSNBC.com

" ... The company once targeted $30,000 as the price for a Chevy Volt. But the cost of developing the technology is making that an unreachable dream. Lutz now figures a more realistic price for the Volt would be about $48,000. He reckons that $40,000 might be possible, without making any profit. Only government tax incentives could take the price tag nearer to $30,000."

Surely they realize that at $48K that's a non-starter. Possibly, in that context, he's saying that as the opening steps for begging for a subsidy. Or, we can believe the conspiracy theorists on this board, and it's all just expensive show biz.

 

I sat down the other day to figure that out. I came up with $7500 lifetime fuel savings, vs the Prius, If I could drive all-electric miles on a Volt-like vehicle. (At $0.10/kwh and 4 mi/kwh, for 150K miles). I'd pay a bit more for the insurance it would provide against spot gasoline shortages. So I get $30K as a fair deal from a cost standpoint.

For another $18K premium, I calculate that I'd get almost 3x as much lifetime carbon avoidance out of rooftop solar cells here in VA (at VA power's generation mix.) Given how few people do rooftop solar here, I'm guessing a $48K Volt is not cost-competitive even among rational, environmentally conscious people willing to pay for do-it-yourself carbon avoidance. Putting that another way, I'd say a $6K premium would put it on a par with rooftop solar in VA, in terms of lifetime carbon avoidance per subsidy dollar.

 

Can you buy a Prius for 22,000?

How odd was it reading this?

It seemed to me he has taken an old anti-Prius rant and redone the numbers. This is exactly the sort of analysis that greeted the Prius on introduction.
How does the volt compare or will it compare if it ever is put into production, to the Prius for size, performance, carrying capacity, comfort as well as price and efficiency? I have no idea how big a Cobalt is.

 

OK to be realistic all of Lutz's comments have to be taken in context. First and foremost Lutz is GM's Salesperson No 1!!! It's his job not only to get the new vehicles designed and built but also to get them sold. It's why he's always in the news and giving interviews.

What he is doing here is the salesperson's tactic of 'sending the buyers to the ceiling'...
" If I can get your payments to the low $800s would that be OK on this Malibu?"
It's easier to peel someone off the ceiling then to keep jacking them up.

So now the GM faithful and anyone interested in buying a Volt can see that it's going to cost them if they want to get one. Mission accomplished.
But... Generous Motors somehow does the right thing and keeps the pricing to a 'low special ( for you!!! ) of only $36999 for a limited time only.' Mission Accomplished.
But... this price while accurate from an accounting pov is not really what it will cost GM on a per vehicle basis. GM is spending billions to develop the Volt. These billions are being spent today in R&D and testing. They should be allocated down the road over some future volume. If for example they are spending $2 Billion on R&D and expect to sell 100,000 units then the cost of amortizing today's expenses is $2,000,000,000 / 100,000 = $2000 per vehicle!!!

But... if one amortized the entire $2 Billion over the first year's volume of say 10,000 units then the cost is $20,000 per unit. Which number would you like to use, Mr Lutz? "Well let's use the one that puts us in the best light. Let's also use the one that might get the Feds to kick in some money to help us defray the costs we're spending now."

It's just good salesmanship on his part.

 

Anyone notice the (stupid) mistake in the following quote rom the OP's link?:

Generators are measured in kw, not in kwh! Can we trust the author's understanding of the issues after this?

Second point: How can we put any real confidence in comparisons between two cars that don't exist yet?

Final point: Does Lutz really think he can sell 100,000 Volt's a year for $48,000 each, if the real-world freeway distance on EV is 32 miles at slower freeway speeds or the low 20's at higher freeway speeds?

I've said I'd buy a Volt if it's the first car that meets my needs. But I've also said PHEV-40 or EV-75 are my minimum requirements, and I'd prefer (and pay extra for) PHEV-60 or EV-100. I will not buy a PHEV-32 from GM. I would probably buy a PHEV-30 from Toyota, but only because of Toyota's exemplary history of quality.

Announcing a $48,000 price for the Volt sounds to me like Lutz is laying the groundwork for canceling the program. Either, "Sorry, we tried, but we cannot do it because nobody would pay what we have to charge," or they build a few thousand of them, set the price so high that nobody buys, and then they cancel the program.

 

HOLY COW!!! I couldn't afford to be green if the Volt became my only choice. For the price of a Volt someone could buy a Prius AND put in modest solar panels or some other significant green project for their home.

 

I love this quote:

 

Reality check....

The Volt is a new 'clean sheet' vehicle that's about the size of a Prius. 'Clean sheet' vehicles do require somewhat more R&D than say an updated Camry. But after all this is just a smallish two door commuter with a smallish ICE/generator. How much could something like this cost to build and what would it sell for?

It probably costs under $10000 to build such a small vehicle and exclusive of R&D amortizations it should sell for about $15000 - $18000. But the Volt does have an expensive Li-ion battery pack and an electric motor to drive the wheels. How much should be added? Make a guess.

$6000 for the battery and $500 for the motor? $10000 for the battery?

So let's take the worst case scenario....
...it costs $10000 to build a small-ish 2-seater
...it costs $10000 for a Li-ion battery pack ( initial copies are probably close to being handmade )
...it costs $500 for an e-motor
...R&D? Somewhere between $4000 and $20000 depending on how one wants to allocate the costs.
...Profit. This depends on how the R&D expenses are allocated. Initially if a vehicle has a high R&D amortization then there's NO PROFIT. But the high amortization means that the vehicle get to break even sooner. After recouping today's R&D expenses of say $4000 to $20000 per unit all that money ends up being pure profit.... CHA Ching!

In addition like the HSD development the E-Flex system can be applied to other vehicles thus increasing the volume thereby lowering the R&D amortization or shortening the breakeven period.

Final point.. By humping this in the press and in front of the Feds GM is creating a basis for asking for a significant tax break for the initial buyers. Why not $5000 per vehicle per buyer? If such a tax credit were instituted then the initial buyers would be paying say $37000 to GM ( Cha-ching !!!! ) but the net price would only be $32000 to the buyer ( very reasonable ). Essentially this puts the US Govt in the position of paying for all of GM's R&D work being done today while guaranteeing a huge profit to GM on what is a smallish two-seater costing at most about $20000 to build.

Isn't Big Business a fine enterprise?

 

There's only one comparison that matters:

Can you buy this car today?
Prius: Yes
Volt: No

 

Wonder why Toyota has not been all that hyped up about PHEV's. On paper they're wonderful. But the vehicle has to be purchased. Toyota is afterall primarily a basic automaker tending to appeal the the most basic buyer...with a basic buyer's wallet and budget.

I think that $30000 is a psychological barrier for any Chevy or Toyota with aspirations to attract a large following in the general public. I could see $35000-$37000 with a $5000-$7000 tax credit being made available. This covers the manufacturers, advances technology, keeps the cost within reason for the bulk of the buying public and helps the country wean itself off petro-fuel.

 

Let's not become calcified like the knuckle-draggers that initially were laughing at the Prius. All advancements in this area are good.

A lot of the numbers being thrown around are meant as signals to other interested parties ( for example GM signalling Toyota ) and for other means as well. This is a mult-multi-multi layered game.

A lot of this info and data is being intentionally leaked to responsive outlets for the purpose of communicating with the other players; i.e. Feds, competitors, buyers, press, regulators, etc.

 

The MSRP of the 2008 Prius is listed at $21K to $24K US.

A cobalt has less interior room than a Prius. The EPA classes it as a subcompact and classes the Prius as midsize. The Cobalt has 86 cubic feet of passenger space and 14 cubic feet of trunk space, versus 96 and 16 for the Prius. (All of that from Fuel Economy). IMHO the rear seats on a Cobalt are for children only. The Cobalt is the platform they are using for the Volt, so it's a fair bet the interior dimensions of the Volt will be in that range.

 

I've been told that a lithium-iron-phosphate battery pack big enough to give a Porsche a 100-mile range would cost close to $30,000. I think the Volt is supposed to be bigger, heavier, and less aerodynamic than a Porsche. So let's say the Volt will need double the energy to go the same distance. That would mean a 30-mile range in the Volt would need about $20,000 worth of batteries. But they'll skimp and use cheaper, lower-quality batteries, so maybe $15,000 for the batteries.

Just my back-of-the-envelope calculation, but based on the real cost of batteries for a real car.

Batteries are very expensive. If someone succeeds in producing low-cost ultra capacitors, everything changes.

 

Thankyou for that, that gives me a much better idea.

 

I've also read that the Volt will be 2+2 passengers - the middle of the back seat will permanent armrests, because the batteries are going in the back and in the center tunnel, not leaving enough room for a middle person in the back. They said there would be extra room for the two back seat passengers, but I'm not sure if that just meant shoulder room or leg room also. (I think I saw this at leftlanenews.com, which is actually a pretty right-leaning group, but I guess the left refers to the passing lane, not political leanings).

The battery testing costs will surely be large for this product, since it's something they haven't dealt with before, and they want to make sure it will last long enough and be safe, given the public's skepticism of LiIon batteries. Also, apparently there aren't many engineers left from the EV1 project, they retired or left, so this is all new to most of the people involved.

 

$19.995.00 was the base Prius Gen I and Toyota had to amortise
$Billion dollars in research and development back then.

No wonder GM's Bob Lutz was saying, Toyota is selling at loss.
But at $19.995.00 Toyota says Toyota was making money back then although smaller amount.

Here is an idea, forget about GM spending $2 billion bringing out the Volts
of phantasm, GM's has got over 10.000 retail dealer outlets vs Toyotas 1300 or so Nation-wide. Get the Technology transfer from Toyota of the new and upcoming Gen III-plug ins and sell them through GM's outlet.

Let says GM's each outlet can sell only _5_ GM's Prius a month, That's 600.000 GM's Prius, er, Toyota Prius disguised as GM's own per year and GM will be making big money..and everybody will win, Consumers, Toyota ,and most notably GM..

 

I took this to mean that the battery tunnel will not be as wide as an adult passenger, so two in back of a Volt will be less crowded than three in the back of a Prius. :crutch: